APEC vows to fight high oil prices

APEC vows to fight high oil prices

Agence France-Presse, Jeju, South Korea

Finance ministers from Pacific rim nations wrapped up a two-day meeting here on Friday with a pledge to share responsibility to fight high oil prices and other impending risks to the global and regional economies.

Surging oil prices cast a long shadow over the 21-member Asia- Pacific Economic Cooperation (APEC) finance ministers' two-day meeting here.

In a joint statement, ministers said members should be mindful of their individual responsibilities in addressing global imbalances such as the need for fiscal consolidation to increase savings in the United States, further structural reform in Japan and more flexibility in the exchange rate systems of developing countries.

"We note that global economic growth has moderated over 2005 but is still likely to remain robust despite high oil prices. Though growth in APEC regions is expected to ease in 2005, we observe that member economies are experiencing faster growth than the global economy," the statement said.

It called for "adequate investment in oil production and refining capacity as well as technology transfer for energy conservation" to meet the challenge of soaring oil prices and called for a reduction in "demand-distorting fuel subsidies."

Dialogue between oil producing and consuming countries should be strengthened, it added.

APEC's 21 members consume more than half of global oil output and include four of the world's five biggest oil importers -- the United States, Japan, China and South Korea.

APEC members also "welcomed" the recent moves by China and Malaysia towards more flexible exchange rate systems.

Chinese Finance Minister Jin Renqin told a press conference China will stick to its "step by step" approach on reforming its currency system for the sake of not only China but also for the regional and global economies.

"We are a responsible government. To have the Chinese (yuan) stable within a certain band will be beneficial to Chinese economic development and also to the economy in Asia and the world," he said.

China freed up its dollar-linked forex regime in July and revalued the yuan by 2.1 percent against the U.S. unit but since then Beijing has dampened speculation that another adjustment might be in store.

U.S. chief delegate, Treasury Deputy Secretary Robert M. Kimmitt, said at the same press conference that Beijing's decision was an "important first step toward China's stated objective of a more flexible exchange rate that would allow the currency to respond to underlying market forces.

"Implicit in our support for that action, and also reflected in China's public statements, ... is the assumption that there will be greater flexibility over time," Kimmitt said.

According to the joint statement, members also agreed to push for progress toward their pledged goals of "free and open trade and investment" in the APEC economies.

"We reiterated our support for the successful conclusion of the WTO Doha Development Agenda negotiations ... (and) call for making significant progress at the upcoming Hong Kong Ministerial Conference," it said.

The WTO's 148 members are trying to complete the Doha Round of trade liberalization after four years of stumbling talks, with the Hong Kong meeting at risk of failure given persistent deep seated differences over market access and trade in agricultural goods.